31 August 2009

Spontaneous Decarbonization in China's Proposed Emissions Targets

The figure above from Reuters shows a proposed set of emissions paths for China from a recent report released by a government think tank in China (previously mentioned here). The Chinese report was heralded by some as marking a significant change of tone from the Chinese, perhaps even making a meaningful international agreement more likely.

In this post I present the assumptions of the rate of decarbonization implicit in the emissions trajectories summarized in the graphic above (I cannot locate the full 900 page report, anyone with a link, please share!). First, here are the annual rates of emissions increases implied by the scenarios above:

BAU

LOW

eLOW

2010

5.7%

2.5%

2.5%

2020

3.4%

1.8%

1.5%

2030

2.5%

1.2%

0.9%

2040

2.1%

0.9%

0.3%

2050

1.5%

0.7%

-0.6%

I want to call attention to the figures for business-as-usual, which represents a trajectory for emissions increases assuming that no additional policies are implemented beyond those in place today. Does anyone really believe that China's emissions growth will be 3.4% per year to 2020 (much less 1.5% per year to 2050)?

Here are some facts: China's emissions grew at an average rats of 12.2% per year from 2000 to 2007 (!) (data from EIA and the figure above). If China's economy grows at a rate of 6% per year, which is less that its recent growth as well as government targets for growth of 9% to 11% per year, then the assumptions are that the Chinese economy will spontaneously decarbonize by 2.6% per year to 2020 and by 4.5% per year by 2050. If China grows at its recent historical average then the implied decarbonization of the Chiese economy is 5.6% per year to 2020 and 7.5% per year to 2050. For a point of reference, the IPCC assumes a rate of spontaneous decarbonization of about 1.5% per year, a number that we criticized as being overly optimistic in our 2008 Nature paper (PDF). And remember, I'm just talking about the BAU scenario, not those requiring actual "emissions cuts."

The assumptions of spontaneous decarbonization in the Chinese emissions paths are yet another example of "magical solutions" on climate policy. With China's emissions growing at 12.2% per year during the present decade, it is inconceivable that this rate will somehow drop to 3.4% per year to 2020, much less the 1.8% or 0.9% per year implied by the low growth scenarios.

The significance of the Chinese proposal is that it indicates that China is willing to join Europe, the United States and others in a fantasyland of climate policy detached from policy reality. It is hard to believe how that outcome leads some to greater optimism on climate policy.

Nothing magical under the UNFCCC and the Kyoto Protocol. Under Article 4 of the UNFCCC the developing countries are not obligated to cut their greenhouse gas emissions. During one of our negotiation breaks I recalled a Chinese negotiator mentioning, the "long march" of energy intensive industries. As the Chinese economy matures, economics will force the energy intensive industries out of China to surrounding countries like Indonesia, Cambodia, Laos. After another 15 or 20 years to Africa etc. So the Chinese like the Europeans will still have a lifestyle will high energy intensity but the generation and the carbon dioxide emissions will be accounted in some other countries without any emissions limitations. The steel, aluminum, copper that goes to a car will be produced in some other countries. China will be more focused on financial management and the service sector which are highly paying jobs that on face value has little GHG emissions, very low energy intensity. However, if you account the imported materials and final product used in this low energy intensity economy it is much higher than today. In fact I proposed to the other negotiators a form of value added accounting for GHG emissions and I they were horrified with the idea. It will remove the magical cover to there ow carbon economy. The final consumers will have to consider the GHG emitted elsewhere. Considering the large portion of the Chinese carbon dioxide resulted to materials exported to US, Europe and other developed countries, the emissions should be subtracted from the Chinese emssions and added to the final consumers. To encourage efficient use of energy, the Chinese or exporters will be only allowed to deduct the equivalent emissions from the most efficient process. So if the Chinese steel mill is producing carbon dioxide per ton of steel twice the most efficient process, China will have to absorb the inefficiency into their emissions and the final consuming country will only have to enter into their accounting the equivalent emission from the most efficient processes. As I mentioned to some negotiators from developed countries this might even turn the "long march" of the energy intensive industries back to Europe, US and other developed economies.

Keep in mind that the Chinese have an option on the table that we don't: nuke. What I don't know about is the economics of Chinese nuke v.s. coal, but it's not inconcievable that the two are so close that they may be willing to commit to a nuclear future in exchange for considerations from the west.

The authors of this study are effectively claiming that a radical change in the growth of China's emissions has ALREADY occurred.

Specifically, If both the numbers in the graph and 12.2% are correct, then the prediction is that Chinese emissions will increase by 3.0% between 2007 and 2010. If current growth is shown to be 3.0%, then everything else is at least plausible.

Although I am very skeptical about this (3.0% from 2007 through 2010), I can see the data points that somebody might use to make such an argument. Certainly I don't think that 2007-2010 growth will approach 12.2%.

Happily, we won't have to wait decades to see if this prediction pans out. Either China has already radically altered its path, or these numbers are completely wrong, and will be shown as such within the next few years.

Its a nice break from long term predictions which won't be seriously tested until decades after their authors have "moved on".

You write, "Here are some facts: China's emissions grew at an average rats of 12.2% per year from 2000 to 2007 (!) (data from EIA and the figure above). If China's economy grows at a rate of 6% per year, which is less that its recent growth as well as government targets for growth of 9% to 11% per year, then the assumptions are that the Chinese economy will spontaneously decarbonize by 2.6% per year to 2020 and by 4.5% per year by 2050. If China grows at its recent historical average then the implied decarbonization of the Chiese economy is 5.6% per year to 2020 and 7.5% per year to 2050. For a point of reference, the IPCC assumes a rate of spontaneous decarbonization of about 1.5% per year, a number that we criticized as being overly optimistic in our 2008 Nature paper (PDF). And remember, I'm just talking about the BAU scenario, not those requiring actual 'emissions cuts.'"

One thing you need to keep in mind are the physical contraints on the situation.

China currently gets about 70% of its electricity from coal. Per wonderful Wikipedia, Chinese coal consumption in 2008 was 2.76 billion tons per year. (The U.S., at #2 in the world, is only a bit more than 1 billion tons per year.)

There simply isn't a physical way for China's coal output to keep doubling every 5-10 years. At most, they probably have ONE doubling left from their current value.

Here's a very good graph projecting China's coal production to the year 2100. It shows total coal production peaking in ~2015 at 2.4 billion tons per year, and declining to about 0.7 billion tons (700 million tons) by 2050.

Obviously, the peak is going to be above 2.4 billion tons per year, but in general that graph is probably a much more accurate prediction than one would get from simply projecting their growth rate in coal consumption over the last decade--a factor of ~3 increase in consumption--for another 2-5 decades.

http://www.globalpublicmedia.com/files/chart2_1.jpg

They simply can't do that. It's not physically possible, because they don't have enough coal. The price for coal would be astronomical if their demand for coal was more than double its present value.

It estimates 48 years of reserves for China (presumably based on the 2006 consumption rate of 2.38 billion tons per year).

It's not possible to say definitively what the Chinese consumption rate will be 10-20 years from now, based on that reserves number. But it's one more piece of evidence that Chinese production is unlikely to more than double from the current 2.76 billion tons per year. And it's also unlikely they can keep up the 2.76 billion tons per year for 4 or 5 more decades.

As I wrote above, the price of coal would skyrocket if they attempted to do that.